New Mortgage Tip #5 – read the paperwork

The loan estimate will come first. Here are some key things to look for:

The APR (see No. 2 above)

The interest rate

The monthly payment

The loan terms, such as a 30-year or 15-year mortgage, adjustable rate or fixed

The total cost of the loan

Cash amount you’ll need at closing

The closing document will come at least three days before you close. It should look just like the first document, but instead of estimates it will have final numbers. If you see any increases or additional fees you weren’t expecting, question the lender immediately. Because if it shows even a tenth of a percent interest-rate jump you weren’t expecting (say 4.1% instead of 4%) — and you don’t question it — that could mean a difference of almost $3,700 on a $176,000 mortgage.

Review and compare them. And, most importantly, don’t be afraid to speak up if you spot a surprise.